Welcome to Freescale’s 2011 Second Quarter Results Conference Call. At this time, all lines have been placed on listen-only mode until the question-and-answer session. Today’s call is being recorded. (Operator Instructions)

I would now turn the meeting over to Mitch Haws. Sir, you may begin.

Mitch Haws – Investor Relations

Thanks and welcome to all of you to our second quarter 2011 conference call. With me today are Rich Beyer, our Chairman and CEO and Alan Campbell, our Chief Financial Officer.

Before we begin the prepared remarks, let me remind everyone that today’s discussion contains forward-looking statements based on our current outlook and as such it does include risks and uncertainties. Please refer to our press release for more information on the specific risk factors that could cause our actual results to differ materially. Also we will reference non-GAAP financial measures and we will post the appropriate GAAP financial reconciliations to our website at freescale.com.

With that, let me now hand the call over to Rich.

Rich Beyer – Chairman and Chief Executive Officer

Good afternoon and welcome to our second quarter conference call. We are very pleased that Freescale completed initial public offering in late May and return to the public markets. Many of you on the call today played a key role in the success of the offering and we appreciate your strong support.

You will recall that the value proposition for Freescale that we described during the IPO process was to generate revenue and earnings growth above the market rate. Our Q2 results validate that value proposition.

Looking at the highlights, revenues of $1.223 billion represented an increase of 2.4% sequentially and 10% year-over-year. Adjusted gross margins increased sequentially to 45.6%, a 100 basis point increase over Q1. This performance generated adjusted net income of $70 million, a 23% increase from Q1. And adjusted earnings per share were $0.33.

Our design wins in the quarter continued at a record pace and were strong across all of our target markets and regions. Now, Alan will provide additional insights into our financial performance in Q2. I will then provide an update on some business highlights and our Q3 outlook. After which, we will be happy to entertain your questions.

Alan Campbell – Chief Financial Officer

Well, good afternoon and thank you again for joining today’s call. As Rich said, Q2 represented another quarter of solid execution and marked our eighth consecutive quarter of sales growth and our ninth consecutive quarter of gross margin expansion. As I review the financial results in more detail, please note I will be focusing on the results excluding the impact of purchase price accounting and certain other items. We believe this to be a more meaningful representation of our ongoing financial performance.

Let me now drill into the second quarter. Revenues were $1.223 billion, representing a sequential and annual increase of 2.4% and 10% respectively. This was higher than the outlook communicated at the beginning of the quarter. We do believe some of this growth resulted from our customers across all regions increasing inventory as a reaction to the earthquake in Japan.

Our Microcontroller product sales were $430 million, 1.4% above the first quarter and 11% above Q2 of last year. Automotive Microcontroller sales were down from Q1 that grew 11% compared to the same period last year. Sales of our microcontrollers into the industrial markets increased more sequentially and a year-over-year basis. Networking and Multimedia revenues were $312 million in the quarter, up 3% from both Q1 and from Q2 last year. Our Networking revenues benefited from a moderate improvement in the service provider and enterprise markets.

Revenues in our consumer-focused businesses declined slightly from Q1 as expected, but were up over Q2 last year. RF, Analog and Sensor product net sales were $315 million, a 9% above the prior quarter and 24% above Q2 of last year. In Q2, our RF business saw solid growth in the wireless market. Our Analog and Sensor businesses also experienced growth on a sequential and year-over-year basis. Analog revenues grew from Q1 and Q2 last year based on strength in both Auto and Consumer with the sensor business benefiting primarily from growth in our consumer portfolio. Our Cellular product sales were $122 million and were down on both sequential and annual basis.

Other products which consist primarily of foundry sales and IP revenue resulted in net sales of $44 million compared to $39 million in the first quarter and $31 million of last year. Finally, sales to our distribution increased 5% sequentially and were up 14% compared to Q2 of last year. Distribution represented 24% of our sales in the second quarter. Distribution inventory was at 10.9 weeks and this compares to 9.3 weeks in Q1 and 7.9 weeks at the same time last year. Our book-to-bill in the second quarter was 1 flat with the first quarter.

Now, let’s look at gross margin and operating expenses. We continue to make sequential and annual improvements in gross margins. On a sequential basis, adjusted gross margin improved by 100 basis points, the operational factory improvements and depreciation being the major contributors. On an annual basis adjusted gross margin improved by 470 basis points. Again this was driven by improved factory utilization, operational efficiencies, procurement improvements, and depreciation resulting from the reduced capital expenditures.

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